Upgrading to LTE will benefit carriers and end users

Posted on August 29, 2014 10:35 am

The proliferation of mobile devices in Africa has shifted user behaviour and this has empowered mobile operators to strengthen their networks for high performance and scale to meet the growing demand. To build for this anticipated surge, mobile operators are investing millions of dollars to strengthen their networks through Long Term Evolution, a wireless broadband technology that supports roaming Internet access via mobile devices. Sub Saharan Africa is expected to be one of the largest contributor to this growth with a predicted ten billion smartphone subscribers. The region also boasts the world’s second largest mobile market after Asia. The continent, together with Asia, are expected to be among the fastest-growing smartphone markets over the next five years. Meanwhile, South Africa, Nigeria, and Kenya are considered the most advanced mobile markets in sub saharan Africa. Amongst this diverse country mix also exists a diverse range of average revenue per user, which is correlated to GDP per capita. And Kenya, which has one of the highest GDP per capita in the Sub Saharan Africa has an average revenue per user (US$6.80) almost double the regional average.

The migration from 2G to 3G was expected to be revolutionary, promising higher speeds and greater capabilities. Operators in some African countries have achieved the fastest migration from 2G to 3G/4G networks, especially in Kenya and South Africa, where 3G/4G represent more than 50% of connections. Nearly 10% of South Africa connections are LTE. Nigeria and Kenya are both seeing extraordinary growth in new subscriptions. As LTE becomes the new standard, naturally the question remains: Can African network operators create a revolutionary experience this time around for their end users? The answer is big YES. Safaricom CEO was quoted last year as saying that enhanced services, better coverage through the use of macro and small cells and carefully planned inter-technology handoffs will all play a part in Kenya mobile phone industry growth. MTN Group headquartered in South Africa recently announced plans to lay off staff in what the management claimed was a plan to increase performance of the network in the face of surging data usage because according to the MTN internal review, LTE is all about profitability. In Tanzania, the Vodacom management believes the LTE is correlated to the customer experience.

According to a senior manager working there, happy customers lead to greater usage and less churn, both of which contribute to growth with new services and lower operational expenses on the bottom line. However, the flip side there has been several common end-user obstacles cited as carriers pursue a widespread adoption of LTE subscriptions among them high price of data plans, limited coverage and limited choices for 4G enabled handsets and consumer electronic products. Several network operators are planning to implement a pay-per-feature model with personalised service plans to increase Average Revenue Per User which will create tiered pricing and value propositions for LTE. Also, with LTE moving carrier traffic to an IP-based nature, it is expected to create opportunities for operators in Africa to harness the data and leverage it for analytical and planning purposes. A good example is when voice traffic is treated as data, carriers can create a self-aware network that automatically prioritise traffic amid network log-jams with new IP-based traffic yielding valuable insight into the way subscribers use networks, paving the way for future infrastructure planning and service roll-outs. Overall, there’s a multitude of reasons driving carriers to invest millions of dollars into upgrading their infrastructure. In Sub Saharan Africa, sundry of strategies to realise a return on investment along the path to successful LTE deployments is the key driver and should lead to profitability and customer satisfaction.

Contador Harrison